Correlation Between NYSE Composite and Stock Yards

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stock Yards at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Stock Yards into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stock Yards Bancorp, you can compare the effects of market volatilities on NYSE Composite and Stock Yards and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Stock Yards. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stock Yards.

Diversification Opportunities for NYSE Composite and Stock Yards

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between NYSE and Stock is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stock Yards Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Yards Bancorp and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Stock Yards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Yards Bancorp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stock Yards go up and down completely randomly.
    Optimize

Pair Corralation between NYSE Composite and Stock Yards

Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.45 times more return on investment than Stock Yards. However, NYSE Composite is 2.24 times less risky than Stock Yards. It trades about -0.29 of its potential returns per unit of risk. Stock Yards Bancorp is currently generating about -0.13 per unit of risk. If you would invest  2,020,982  in NYSE Composite on September 28, 2024 and sell it today you would lose (84,532) from holding NYSE Composite or give up 4.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

NYSE Composite  vs.  Stock Yards Bancorp

 Performance 
       Timeline  

NYSE Composite and Stock Yards Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NYSE Composite and Stock Yards

The main advantage of trading using opposite NYSE Composite and Stock Yards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stock Yards can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stock Yards will offset losses from the drop in Stock Yards' long position.
The idea behind NYSE Composite and Stock Yards Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Money Managers
Screen money managers from public funds and ETFs managed around the world
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges